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Author: [Investments] Topic: How did Al Gore just buy Apple stock this week at $7.00 a share?
scalabrine send a private message View Space | Blog | Friends | Playbook |
scalabrine
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#1
Posted: 1/19/2013 3:18:30 PM
http://finance.yahoo.com/news/al-gore-nets-another-fortune-164510966.html

Rookie trader here so go easy...

Options expire fairly quickly. Apple Stock was around $7 in 2004. It's now nine years later.

Am I missing something as to how someone could have a nine-year call option with a strike price of $7?

What's going on with this transaction? Is this special to Board members only (likely...)?
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wallstreetcappers send a private message View Space | Friends | Playbook |
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#2
Posted: 1/19/2013 3:28:00 PM
He has been involved with Apple for years..he was given warrants which were likely granted even before 2004.

Warrants can have a very long period before they expire, it all depends on the company and how they structure stock grants.

This wasnt anything special for Gore, if it was for compensation for him being on the board then whomever was on the board then got the same warrants..if it was for his participation in the company in some fashion then he could have got warrants in lieu of compensation.


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#3
Posted: 1/21/2013 8:39:15 AM

How did he become involved with Apple? 

Was this some kind of special favor for an ex-VP to gain influence in DC?

These warrants are equivalent to the company giving away equity.

The sale cost him a little under $500K and he made over $26 million.

Also, I would be wary if I were a casual Apple stockholder. Why sell now? It's obvious Gore knows something we don't and why wouldn't he. I would love to short this stock if I could...
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#4
Posted: 1/21/2013 11:01:09 AM
scal,

You could have done the same thing, bought leaps on the stock in 2004 and benefitted the same way, just rolled them over every two years or purchased shares in the open market back then.

The warrants are just a way to not have to initially buy the shares, but you still have to buy them when you ex the warrants.

I wanted to short Apple over 700 and I think eventually it goes under 100.

Bubbles pop and margins compress and Apple will end up going down the same way Cisco, Dell, Microsoft all did.
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mikelinna
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#5
Posted: 1/22/2013 10:42:35 AM
And let's not forget he did invent the INTERNET
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#6
Posted: 2/5/2013 8:36:44 AM
options
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scalabrine send a private message View Space | Blog | Friends | Playbook |
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#7
Posted: 3/6/2013 10:39:36 AM
QUOTE Originally Posted by wallstreetcappers:

scal,

You could have done the same thing, bought leaps on the stock in 2004 and benefitted the same way, just rolled them over every two years or purchased shares in the open market back then.

The warrants are just a way to not have to initially buy the shares, but you still have to buy them when you ex the warrants.

I wanted to short Apple over 700 and I think eventually it goes under 100.

Bubbles pop and margins compress and Apple will end up going down the same way Cisco, Dell, Microsoft all did.

Come on man. Under $100? In how many years? Look at how much cash reserves they have: $137 billion!!
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#8
Posted: 3/6/2013 11:14:11 AM
QUOTE Originally Posted by scalabrine:


Come on man. Under $100? In how many years? Look at how much cash reserves they have: $137 billion!!


It will..show me a company who over a 10-15 yr horizon has a PE ratio which is 3 standard deviations from the norm?

Apple's PE will not keep at these levels, they are losing margin and losing sales..the stock has dropped from 700 to 400 and it will drop to 100 eventually.

No stock, even Google will have a growth PE forever, when the margins start compressing the selling starts..which is exactly what happened with Apple so far.
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#9
Posted: 3/7/2013 11:05:32 AM
What's "the norm?" The norm for this industry??
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#10
Posted: 3/7/2013 1:12:58 PM
QUOTE Originally Posted by scalabrine:

What's "the norm?" The norm for this industry??


Correct..

Or once a company becomes mature then the norm for the S&P
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